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Intel’s Second-Quarter Results: A Closer Look at Expectations


Intel Corp. is set to release its second-quarter results after the bell on Thursday, and investors are eagerly awaiting the numbers. Let’s take a closer look at what to expect.

Challenging Times for Intel

In the previous quarter, Intel posted its largest quarterly loss ever, amounting to a staggering $2.76 billion. The company has forecasted an adjusted second-quarter loss of 4 cents per share, with estimated revenues ranging from $11.5 billion to $12.5 billion. This bleak outlook has not been lost on market analysts, who, on average, expect a similar loss of 4 cents per share but predict slightly higher revenue at $12.12 billion.

Margin Troubles

One area of concern for Intel is its gross margins, which have steadily declined over the past few years. Intel has announced that it will begin reporting margins for its emerging contract foundry business, IFS, next year. For the current quarter, the company has forecasted adjusted gross margins of approximately 33.2%. Investors will be keeping a close eye on these figures.

Division Performance

Analyzing Intel’s different business divisions, analysts surveyed by FactSet have made the following predictions:

  1. Client Computing Group (PC sales): A projected decline of 20.6% to $6.08 billion.
  2. Data-Center AI Group (AI sales): An anticipated fall of 18.2% to $3.8 billion.
  3. Network and Edge (sales in networking and edge technology): A predicted drop of 36.6% to $1.48 billion.
  4. Foundry Services (revenue from semiconductor manufacturing services): Expected growth of 22.3% to $149.2 million.

These projections reflect the challenges Intel has been facing in various areas of its business.

A Bumpy Ride for Intel Shares

In June, Intel shares experienced a significant decline, making them the worst-performing stock on the Dow Jones Industrial Average for two consecutive days. This slump occurred after the company outlined its plans for its contract foundry business but failed to disclose any major customers, leaving investors uneasy.

Mobileye’s Performance

Analysts are also focusing on Mobileye, a subsidiary of Intel that specializes in autonomous driving technologies. They expect Mobileye’s revenue to increase by 8.8%, reaching $500.3 million. It’s worth noting that Intel spun off Mobileye last year, and in June, an Intel subsidiary launched a secondary offering that did not benefit Mobileye directly.

Despite recent challenges, investors and industry observers will be closely examining Intel’s second-quarter results for indications of a potential turnaround. The outcome will not only impact Intel’s future but also shed light on how effectively the company can compete with tech giants like Nvidia and AMD in the field of artificial intelligence.

From July 2022: Intel stock plummets after wide earnings miss, execution mistakes

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